EXPLORING COLLABORATIVE PUBLIC PROCUREMENT PRACTICES (2018)

Transcription

1 EXPLORING COLLABORATIVE PUBLIC PROCUREMENT PRACTICES (2018) Authors Andrea Patrucco, Ph.D - Assistant Professor in Supply Chain Management at Penn State University, United States with research interests in organizational design of public, and the management of collaborative Supply Chain relationships. Jane Lynch, Ph.D - Senior Lecturer at Cardiff Business School, Cardiff University with research interests in collaboration, social public and community benefits of local sourcing. Christine Harland, Ph.D - Gianluca Spina Chair in Supply Strategy and Full Professor at Politecnico Di Milano, Italy with research interests in supply strategy, and how public can be used as a lever for government reform. Jan Telgen, Ph.D - Professor at University of Twente with research interests in the efficient use of public methods to be both effective and achieve policy goals. Tunde Tatrai, Ph.D - Professor at Corvinus University of Budapest in Budapest, Hungary with research interests in public, electronic and sustainable purchasing.

2 Contents Abstract Introduction Theoretical Background Drivers, Benefits and Challenges with CPP A Conceptual Framework for Exploring CPP Methodology Findings Collaboration enabling and driving factors Goals and Objectives Driving the Collaboration Organisational Collaboration Forms Collaboration Activities Collaboration Tools and Performance Management Systems A Detailed Framework for Analysing CPP Initiatives Discussion and Conclusions References... 32

3 Abstract The report presents findings for NIGP and CIPS on collaborative public (CPP) as a result of a targeted online survey by IRSPP (International Research Study in Public Procurement). Collaborative working is an established skill which, when managed effectively, brings organizations many benefits, such as improving relationships with suppliers and other organizations. This report highlights findings for some of the most debated characteristics of CPP, including economies of scale, a reduction of transaction costs, and the deliberated role of public for leveraging socioeconomic benefits.

4 1. Introduction There has been a long and continued discussion about how to improve the management of in the public context, one which has caught the attention of scholars from Thai (2001) to Tkachenko et al., (2017). Within this discussion, one of the major debated trends has been the greater centralization of activity, which is where conceptually and practically collaborative is positioned (Bakker et al., 2008). Simply aggregating spend through centralization, however, is not the panacea for optimizing the full-value position achievable through effective collaboration. In Europe, the United States, and other countries worldwide, we can observe organizations being created at national, regional, and local levels for increasing the implementation of collaborative public (CPP) projects (Meehan et al., 2016). These structural initiatives are associated with many potential benefits (e.g., economies of scale, savings on purchasing price, requirements standardization, opportunity to develop expertise), but also drawbacks (e.g., higher process cost, coordination needs, loss of capabilities on activities, managerial complexity), which varies dependent on the organizational form adopted to manage the collaboration. Levy (2010) highlights a mixed perception by different government levels about which collaborative approach delivers the best performance outcomes. For example, some nations have a strong mandate, and so organizations are being forced to collaborate, thereby ensuring compliance. In contrast, CPP is still very much voluntary for nations that do not have an enforced mandate. In general, research evidence suggests that the number of contracting authorities adopting collaborative structures are increasing (Levy, 2010). Based on these premises, and using data collected from participant members of NIGP: The Institute for Public Procurement and CIPS (Chartered Institute of Procurement and Supply), this report aims to synthesize the existing scholarly knowledge on collaborative public (CPP) initiatives with new insights from survey data findings which reflect on the perceptions of different public institutions globally. This study further explores the causal linkage among the objectives of the collaboration, the process

5 of the collaboration, and the performance obtained through the collaboration as perceived by NIGP and CIPS members. The results are limited by the sample size. Whilst the descriptive statistics (Tables 4a and 4b) largely represent all classifications, the total sample size ensures fair representation across products and services, and by amount of spend. A larger sample size may have further clarified some of the findings where the results for variables examined were weaker. This point is relevant for operational activities (Table 8) and strategic activities (Table 10). 2. Theoretical Background Collaboration is normally applied beyond and across all management. However, the term collaborative public may be applied horizontally among different firms or agencies, or vertically in supply chains. Some of the more frequently used terms are featured in Table 1. Table 1. Terms Used Comparable with Collaborative Public Procurement Type Definition Cooperative Purchasing Purchasing Group The cooperation between two or more organisations in a purchasing group, in one or more steps of the purchasing process by sharing or bundling their purchasing volumes, information or resources in order to improve their performance (Schotanus and Telgen, 2007). Two or more organisations that purchase together, either formally or informally, or through a third party (Hendrick, 1996). Means combining the actions of two or more contracting authorities. The key Joint defining characteristic is that there should be only one tender published on behalf of all Procurement participating authorities (Tatrai, 2015). Purchasing Consortium Consists of two or more independent organisations that join together, either formally or informally, or through an independent third party, for the purpose of combining their individual requirements for purchased materials, services, and capital goods to leverage more value-added pricing, service, and technology from their external suppliers than could be obtained if each firm purchased goods and services alone (Nollet and Banlieu (2005).

6 At least 45 different terms have been identified in publications relating to CPP (Essig, 2000). However, the term is used in this study to describe the phenomenon of public organizations collaborating horizontally with each other to procure goods and services. According to Murray et al. (2008), an alternative collaborative purchasing structure is shared service, which enables public bodies to maximize the benefits of both the intra-organizational hard core/soft core model and inter-organizational consortia participation and should be considered as an important option, especially when public organizations are smaller and/or lack resources and capabilities in. Implementing these types of initiatives is not easy, and administrations usually involve themselves to obtain most of the benefits associated with CPP. 2.1 Drivers, Benefits and Challenges with CPP The main reasons for an increase in CPP include the development of E-Procurement (Huber et al., 2004); shifting agendas from a short-term, internal focus to a long-term, external relationship focus (Essig, 2000); an increased level of competition and cost pressure (Nollet and Beaulieu, 2005); an increased awareness and importance of purchasing (Walker et al., 2013); and the wish to counterbalance the power of large suppliers (Nollet and Beaulieu, 2005). The benefits can be broadly categorized as improved efficiencies and improved effectiveness (Schotanus, 2005; Schotanus and Telgen 2007; Walker et al. 2008). Efficiencies gained from such collaboration can be termed as collaborative efficiencies. Multi-organizational arrangements enable far greater levels of interdependency and operating efficiency that could not be achieved by organizations when working individually (Elston et al., 2015). Effectiveness through collaboration may be reached through a focus on quality enhancement of the goods or services purchased through the collaboration, as well as a more effective execution of process activities, such as learning from other participants in the collaboration (Bakker et al., 2008). Enhanced supplier relationship management arising from the collaboration may further increase innovation or improve risk management (Patrucco et al., 2017).

7 The challenges include potential increase of complexity of the purchasing process (Tella and Virolainen, 2005), loss of flexibility and control of activities (Schotanus, 2005), increase in coordination costs (Johnson et al., 2014), plus there is often a need to change and adapt specifications (Schotanus, 2005). However, specific characteristics of CPP remain debated, these include economies of scale (Rozemeijer, 2000; Nollet and Beaulieu, 2005), reduction of transaction costs (Johnson et al., 2014), improved relationships with suppliers and other organizations who are part of the purchasing consortium (Gobbi and Hsuan, 2015), and an increased awareness and importance of purchasing (Walker et al., 2013). A summary of characteristics can be summarized as follows. Table 2: Summary of Characteristics for CPP Drivers Benefits Challenges Debated E-Procurement Long term focus Increased Competition Cost Pressures Strategic Procurement reform Overall operational efficiencies Improved process quality Improved product quality Increased process complexity Supply flexibility Control over activities Increased coordination costs Risk mitigation - Economies of scale Improved relationships Increased awareness of Reduced costs Strategic Balance of power Innovation - - Table 2 summarizes the key characteristics of CPP, with further classifications possible, such as collaboration types, collaboration processes, and collaboration outputs.

8 However, there is a lack of existing framework suggestions within the CPP literature which explore the linkages between the drivers, benefits and challenges. 3. A Conceptual Framework for Exploring CPP Following a review of collaborative activities identified in the research fields of public management, purchasing management, and public, this leads to the design of five pillars categorizing CPP initiatives which form an initial framework for managing the strategic partnerships: 1) Drivers and Enablers for Collaboration; 2) Collaboration objectives; 3) Organizational Design; 4) Collaboration Process; 5) Collaboration Performance. Figure 1. Conceptual framework for Collaborative Public Procurement Driving and Enabling Factors WHY: Collaboration Objectives HOW: Organizational Design WHICH: Collaboration Activities WHAT: Performance of the Collaboration

9 Each of these five pillars of CPP are explained in detail below: 1) Drivers and Enablers of Collaboration Effective governance and an integration of human resources enables the collaboration to be successful. When it comes to highlevel support, two aspects are crucial and may drive the CPP: (1) government support influences the success of the group through policy implementation by incentivising collaboration, and (2) top management support, because to obtain commitment from all the people involved, commitment must start from the top (Nollet et al., 2017). Other key enablers include trust, member commitment, and information sharing. Information sharing is important to avoid problems of information asymmetry in the strategic partnership; in this regard, an effective risk and benefit sharing policy should be agreed in the partnership and implemented to ensure mutual benefits from the collaboration. The presence of these factors allows the group to obtain higher performance and includes those factors facilitating (hindering) the collaboration; thus, it can happen that a purchasing consortium willing to fulfil objectives fails in implementing them. 2) Collaboration Objectives The operational efficiencies of collaboration provide motives for organisations to form a purchasing consortium. However, the objectives may be impacted by the consortium structure. Entities joining the consortium may have more operational objectives (e.g., obtain savings, improve competences) than strategic ones (e.g., improve relationship with suppliers). An organisation may not have the skills to perform specific tasks alone and/or are unsatisfied with the existing quality of purchased goods/services. These reasons provide the motivation for forming or joining a purchasing consortium. Public organisations may have some broader objectives aimed at delivering specific policies like innovation, local economic development and sustainability policies. Figure 1 demonstrates that the collaboration objectives and organizational design are interdependent. Changes to one will affect the other. 3) Organizational Design - Refers to the macro-organisation (adopted form) and the micro-organisation (dynamics among group members and roles). This pillar is important because it impacts on the way the collaboration activities will be designed and performed. More specifically, dependent on the number of members and the way that perceived

10 power is shared, organizational design directly affects the way in which collaboration activities are implemented. Different forms of design have been identified in the literature such as related to the micro-organisation (dynamics among group members); these include motivation, decision making (in terms of how power is distributed among members), conflict resolution and the number of members involved. Another important factor which influences the organizational design is the collaboration leader, coordinator or specification advisor. 4) Collaboration Process - This pillar applies to all levels, from operational level (dayto-day management) to the more strategic level (long-term impact) affecting the performance of the purchasing group. The collaboration process is supported by digital tools such as s, virtual communication (e.g. Skype), use of e-rfx or electronic systems order management and suppliers payment (i.e. e-ordering and e-invoicing). The collaboration process directly impacts on the performance of the consortium, so understanding the different influences for each level is key. At the operational level, organisations may collaborate on the design specification, tender document preparation tender selection and evaluation processes in order to prevent duplication of these activities in each organisation. In contrast, at the strategic level, organisations may collaborate due to regulation, demand management, and supplier development. A key part of the collaboration process includes performance measurement of suppliers and measuring the effectiveness of the consortium itself. 5) Collaboration Performance The fifth pillar relates to operational efficiencies, such as savings and decreased process costs achieved through the consortium. In addition, effectiveness is measured by improved product quality. Moreover, the strategic performance relates to the improvement of relationships with suppliers and other external organizations thus mitigating risk. The level of innovation and sustainable are also important. Performance measurement will determine the longerterm outcomes of the consortium. Poor performance would indicate that efficiencies (e.g. cost savings) or strategic goals (e.g. improved supplier relationships) are not being achieved by CPP and so the consortium would be likely to dissolve.

11 Amalgamating this evidence, the five pillars were applied during the 7th International Research Study on Public Procurement (IRSPP 7). 4. Methodology IRSPP (International Research Study of Public Procurement) is an international network representing 45 countries whose members are academics, practitioners, policy makers, and purchasing professional associations, including CIPS, NIGP, PiANOo and NEVI (Knight et al., 2012). IRSPP (IRSPP 1,2,3,4,5,6) coordinates and offers senior practitioners an intense, three-day practitioner workshop approximately every two years. The themes of the workshops have historically been designed around the major public challenges at that time. Table 3: IRSPP Historical Research Themes Workshop IRSPP 1 IRSPP 2 IRSPP 3 IRSPP 4 IRSPP 5 IRSPP 6 Research Theme Explored what is known about public and the major issues facing this research field. Examined similarities and differences across public in sectors such as health, defense, education and local government. Examined how to build capacity and capability in public. In the wake of the financial crisis, this study explored the role of public in designing and delivering economic stimulus packages. Focused on the engagement of small and medium enterprises (SMEs) in public contracts and how to improve their involvement. Examined evidence of community benefits policies and implementation of community benefits clauses (social, economic and environmental). In 2017, IRSPP 7 was themed on Collaborative Public Procurement, the same theme explored among CIPS and NIGP members. Participant responses were collected via an online survey instrument requesting information about specific collaborative public approaches adopted between 2013 and 2017 in the respondents public

12 institutions. Adapted from the five pillars in Figure 1, the survey questions were structured into seven different sections: 1. General information about the respondent and the collaboration project (e.g. job title, dollar value of the initiative, level of collaboration). 2. Factors and events recognized as having a driving / enabling role for the collaboration. 3. Goals and objectives driving the collaboration. 4. Organizational form used to manage the collaborative activities. 5. Processes collaboratively executed distinguished between operational, managerial, strategy forming and policy forming. 6. Tools used to support collaboration. 7. Performance measurement system structure. The survey instrument was distributed to practitioner members of NIGP and CIPS, collecting a total of 88 responses, with the break-down of participant samples reported in Tables 4a and 4b. Table 4a. Summary of Main Sample Descriptive Statistics Descriptive NIGP CIPS Number of responses Purchasing Categories Products 45% 52% Services 55% 48% Level of the Collaboration City/Municipality 25.6% 2.0% Regional 12.8% 34.7%

13 National 17.9% 40.8% State 43.6% 6.2% Other 0.0% 16.3% Value of the Collaboration Lower than 500, % 0.0% 500,000-1,000, % 10.2% 1,000,000-5,000, % 18.4% 5,000,000-10,000, % 10.2% 10,000,000-50,000, % 16.3% 50,000, ,000, % 14.3% Higher than 100,000, % 30.6% Number of Partners < % 49.0% % 12.2% % 16.3% > % 22.5% Table 4b: Participant Sample CIPS Participants UK EUROPE 19 ASIA 4 AFRICA 13 AUSTRALASIA 11 MIDDLE EAST 2 TOTAL 49 NIGP Participants United States 39 Table 4b further breaks down the CIPS survey sample by global region. CIPS participant sectors include Health, Sustainability, Carbon, Social Environment and other

14 public organisations. In contrast, NIGP members are from sectors including Education, Housing, ICT, Utilities and Transport. Collaborations included in the sample relate mostly to National (for CIPS) and State (for NIGP) levels, and both the value and the numbers of partners involved are heterogeneous, despite a polarization (for both NIGP and CIPS) toward highest and lowest purchasing categories. 5. Findings This section presents the preliminary data analysis as an opportunity to consider the different collaborative approaches surrounding the CPP environment, in line with the framework presented in Figure Collaboration enabling and driving factors Collaborative projects may be influenced and enhanced by a great number of different factors. In the survey, participants were asked to rate, to what extent each of the selected enabling and driving factors affected the deliverables of the collaboration using a 1 5 Likert scale. Table 5 shows the full results with more significant factors highlighted in blue. KEY (1 = Not at all; 2 = Slightly important; 3 = Moderately important 4 = Strongly important; 5 = Essential; N.A. = not applicable). Table 5. Enabling and Driving Factors Affecting the Collaboration Selection of the collaboration partners Integration of human resources 1 Not at All 2 Slightly 3 Moderately 4 Strongly 5 Essential NIGP CIPS NIGP CIPS NIGP CIPS NIGP CIPS NIGP CIPS 3% 0% 10% 8% 31% 14% 44% 55% 13% 22% 26% 8% 18% 18% 36% 37% 13% 27% 8% 10%

15 Sharing and brokering of information Ability to capture knowledge Sharing of risks and benefits Structuring of the decision - making process Definition of conflict resolution mechanisms Identification of motivating factors for the collaboration Integration of Equipment and systems Identification of an Innovation facilitator Identification of a Regulation/ legal advisor Identification of a Technical/ specification advisor Identification of a Collaboration coordinator Identification of a Collaboration leader Possibility to count on political support Possibility to count on high level support: Definition of Financial problems resolution Definition of how collaboration costs are shared 10% 2% 5% 8% 36% 12% 26% 49% 23% 29% 3% 0% 3% 2% 31% 14% 36% 45% 28% 39% 0% 0% 5% 4% 38% 18% 44% 45% 13% 33% 3% 2% 18% 2% 13% 14% 31% 47% 36% 35% 5% 0% 8% 2% 31% 24% 31% 41% 26% 33% 8% 0% 3% 4% 13% 14% 59% 51% 18% 31% 10% 4% 15% 20% 26% 27% 31% 37% 18% 12% 28% 4% 5% 14% 33% 43% 26% 33% 8% 6% 23% 2% 8% 8% 41% 37% 15% 31% 13% 22% 8% 2% 0% 4% 33% 27% 41% 45% 18% 22% 8% 0% 8% 6% 21% 29% 44% 39% 21% 27% 10% 0% 5% 4% 13% 20% 46% 41% 26% 35% 8% 2% 8% 10% 31% 8% 41% 51% 13% 29% 5% 0% 8% 2% 28% 10% 28% 49% 31% 39% 10% 12% 13% 8% 59% 39% 8% 22% 10% 18% 15% 6% 8% 6% 49% 35% 10% 22% 18% 31%

16 Commitment of partners to invest 3% 0% 3% 8% 31% 18% 38% 41% 26% 33% time Commitment of partners to invest 3% 0% 3% 14% 49% 29% 31% 22% 15% 35% resources Commitment of partners on a governance 3% 0% 3% 4% 28% 27% 44% 35% 23% 35% structure Assurance of transparency 0% 2% 8% 2% 8% 6% 54% 51% 31% 39% Social networking 8% 2% 10% 10% 72% 55% 3% 18% 8% 14% For both NIGP and CIPS, the motivating factors for collaboration, the selection process for collaboration partners, the ability to share and broker information, together with the ability to capture knowledge, and the establishment of mechanisms to share risk and benefits and assurance of transparency, all represent critical enablers affecting the success of the initiative ( moderately, strongly and essential ). In addition, the identification of formal roles in the collaboration were perceived as critical, this is especially relevant for the collaboration leader. Emphasis was given to identifying the high-level support (more so for CIPS members). For activities where there is more diffusion of the results, a more definitive set of responses may have been possible by first separating drivers and enablers in the survey. 5.2 Goals and Objectives Driving the Collaboration The survey asked the respondents to rate, on a 1-5 Likert scale, how much a specific -based objective acted as catalyst for the implementation of the CPP. Table 6 displays the results with the more significant factors highlighted in blue.

17 KEY (1 = Not at all; 2 = A small extent; 3 = A medium extent; 4 = A large extent; 5 = Completely). Table 6. Objectives for CPP Decrease process cost Obtain savings, gain economies of scale Increase quality Standardize and rationalize needs Optimize supply base Reduce supply base Improve relationship with potential suppliers Improve relationship with other institutions Increase competences Centralize management 1 Not at all 2 Small Extent 3 Medium Extent 4 Large Extent 5 Completely NIGP CIPS NIGP CIPS NIGP CIPS NIGP CIPS NIGP CIPS 8% 4% 0% 20% 18% 27% 38% 39% 36% 10% 8% 0% 0% 10% 13% 20% 38% 45% 41% 24% 5% 4% 3% 2% 49% 31% 21% 47% 23% 16% 3% 4% 10% 10% 33% 20% 36% 51% 18% 14% 5% 4% 8% 8% 59% 27% 18% 51% 10% 10% 10% 18% 10% 18% 64% 24% 10% 33% 5% 6% 5% 6% 15% 12% 56% 20% 13% 43% 10% 18% 5% 6% 8% 14% 28% 29% 31% 41% 28% 10% 5% 8% 18% 8% 36% 31% 23% 37% 18% 16% 8% 14% 13% 20% 23% 27% 36% 27% 21% 12%

18 Outsource management of non strategic Improve management of risk Consequences of collaboration on other issues Staff shortage/lack of skills Legal requirement 15% 39% 8% 14% 62% 18% 13% 29% 3% 0% 5% 10% 26% 12% 38% 31% 18% 37% 13% 10% 5% 14% 23% 14% 56% 41% 8% 27% 8% 4% 3% 16% 13% 27% 67% 41% 10% 12% 8% 4% 13% 35% 5% 20% 64% 18% 10% 22% 8% 4% In line with the traditional vision of in the public sector, operational objectives such as obtain savings, gain economies of scale, increase quality, standardize and rationalize needs and optimise the supply base represent the objectives for CPP as perceived by NIGP and CIPS participants. CIPS members also reported relationship management objectives as a main objective to establish collaboration. The objective, process cost decrease, was reported as less of an incentive for NIGP and CIPS members; this may be because CPP usually implies more complexity for activity jointly managed by institutions involved in the project, hence higher initial costs. Other objectives noted in the literature which might benefit from collaboration but not listed in this survey include new market opportunities, social and economic benefits. The influence of CPP on government policy and regulation are addressed later in the report.

19 5.3 Organisational Collaboration Forms Participants were asked to classify the organizational structures and forms used to manage the collaboration. Table 7 reports the descriptions and the survey findings. The most popular forms of CPP are highlighted in blue. Table 7. Types of CPP Type of CPP Description NIGP CIPS External lead buying i.e. representatives of authorities work with an outside and external provide, influencing 2.6% 4.1% specifications and requirements definition; Informal "hard" collaborative public i.e. public institutions systematically working together during the whole process for same category(ies), with all the 35.9% 26.5% members involved in all the stages of the process; Informal "soft" collaborative public Mandated collaborative public Occasional collaborative public Third party outsourcing i.e. bundling together the requirements of different public organisations for the same category/ product/service, submitting a joint tender where not all the organisations play a formal active role they piggy back on the tender; i.e. forced collaboration at the direction of government. i.e. collaboration for the purpose of procuring a specific project, after which the collaboration may cease; i.e. outsourcing of the responsibility of a number of categories to an outside and external provider, responsible for the whole process; 33.3% 38.7% 5.1% 14.3% 12.8% 8.2% 10.3% 8.2% As Table 7 indicates, there is a clear tendency by both NIGP and CIPS members towards informal hard and informal soft forms of collaboration. More NIGP participants favoured a hard informal approach by systematically working together during the entirety of the process for same category (ies). In contrast, more CIPS participants

20 favoured a soft informal approach, such as submitting a joint tender where not all the organisations play a formal active role (this is referred to as a piggy back approach on the tender). More formal options, such as external lead buying or third-party outsourcing, were less preferred; this is possibly because they involve further constraints in a highly regulated sector such as in public. A consistent message from the two sets of data was that CPP was largely applied voluntarily rather than because it was mandated. 5.4 Collaboration Activities Inspired by the literature findings, the collaboration activities have been grouped into levels, the responses of which are now featured in the report: Operational activities (Table 8); Managerial activities (Table 9) and Strategic activities (Table 10). Respondents were asked to rate, on a 1-5 Likert scale, to what extent specific activities were jointly executed during the implementation of the CPP. The most significant activities are highlighted in blue. KEY (1 = not at all; 2 = A small extent; 3 = A medium extent; 4 = A large extent; 5 = Completely; N.A. = not applicable). Table 8. Joint Execution of Operational Activities Demand and needs planning Requirements definition Supply market analysis Tender procedure selection 1 Not at all 2 Small Extent 3 Medium Extent 4 Large Extent 5 Complete NIGP CIPS NIGP CIPS NIGP CIPS NIGP CIPS NIGP CIPS 3% 8% 0% 16% 28% 22% 49% 39% 21% 14% 3% 6% 0% 14% 33% 20% 38% 39% 26% 20% 10% 10% 10% 16% 38% 24% 31% 41% 10% 8% 5% 8% 13% 10% 26% 16% 33% 43% 23% 22%

21 Technical specification documents 0% 6% 5% 10% 28% 20% 36% 41% 31% 22% preparation Bid management 8% 10% 5% 8% 28% 24% 31% 35% 28% 22% Tender evaluation 10% 4% 5% 4% 26% 16% 38% 39% 21% 37% Contract award and management 13% 4% 0% 16% 21% 20% 36% 35% 31% 24% Order management 13% 20% 23% 18% 38% 33% 13% 16% 13% 12% Supplier invoice 38% 27% 15% 18% 33% 27% 8% 12% 5% 16% Payment 38% 22% 13% 18% 33% 29% 10% 16% 5% 14% In relation to the traditional process, Table 8 indicates that collaboration is more evident during the initial stage activities, i.e. demand management, requirements definition and for designing technical specification documents, for both NIGP and CIPS participants. The intensity of the collaboration seems to be smoothed out ( small extent, medium extent and large extent ) with no strong trends identified between NIGP and CIPS in the context of the more operational aspects of the process (i.e. order management). This finding suggests that the benefits of collaborating for operational activities may not always outweigh the efforts required for executing these activities jointly.

22 Table 9. Joint Execution of Managerial Activities 1 Not at all 2 Small Extent 3 Medium Extent 4 Large Extent 5 Completely NIGP CIPS NIGP CIPS NIGP CIPS NIGP CIPS NIGP CIPS Demand analysis and management 8% 10% 15% 18% 28% 24% 33% 37% 15% 10% Risk analysis and management 10% 8% 10% 18% 33% 31% 36% 33% 10% 10% Product/service development 10% 18% 8% 14% 23% 27% 46% 31% 13% 10% Regulation/ compliance 21% 14% 8% 12% 21% 24% 31% 29% 21% 20% management Cost management 23% 8% 8% 10% 31% 37% 18% 29% 21% 16% Supplier development 18% 8% 13% 24% 26% 35% 36% 22% 8% 10% CPP process performance 8% 6% 5% 14% 36% 39% 31% 27% 21% 14% evaluation Supplier performance evaluation/vendor 8% 8% 5% 12% 38% 35% 36% 27% 13% 18% rating Logistics management 26% 18% 10% 16% 33% 39% 26% 16% 5% 10% Financial/budget management 21% 12% 10% 14% 28% 39% 31% 22% 10% 12% The results in Table 9, Joint Management Activities, evidence the most fragmented and insignificant trends for the entire survey. For American versus European practices, collaboration is relevant for management activities such as supplier development and supplier performance evaluation represent a solid base to establish collaboration with other public institutions. Finally, Table 10 exhibits the level of strategic activities practised by participants.

23 Table 10. Joint Execution of Strategic Activities 1 Not at all 2 Small Extent 3 Medium Extent 4 Large Extent 5 Completely NIGP CIPS NIGP CIPS NIGP CIPS NIGP CIPS NIGP CIPS Innovation strategy 8% 12% 21% 20% 26% 31% 21% 24% 26% 12% Outsourcing strategy 10% 16% 21% 14% 31% 35% 18% 24% 21% 10% Sourcing strategy 13% 16% 3% 8% 44% 37% 23% 31% 18% 8% Risk strategy 8% 10% 21% 18% 28% 22% 33% 37% 10% 12% Logistics strategy 10% 22% 10% 10% 51% 43% 13% 20% 15% 4% Procurement Information System 8% 16% 10% 12% 36% 39% 36% 22% 10% 10% strategy Relationship strategy 3% 14% 8% 12% 56% 33% 13% 27% 21% 14% Collaboration is moderately evident ( medium extent ) for managing the Logistics strategy and the Sourcing strategy. Both NIGP and CIPS participants reported applying collaboration to a large extent for managing the Risk strategy and the Procurement Information strategy. However, similarly, to the findings featured in Table 9, the survey found many inconclusive results for strategic activities (Table 10) where mechanisms for intensive collaboration needs to be further developed. This is possibly because institutions are still reluctant to share decisions on such delicate activities. The findings from Tables 9 and 10 raise important questions about the full extent of which collaboration is practiced by NIGP and CIPS participants. These findings have highlighted the importance of operational processes as opposed to strategy and structure as most influential when managing CPP.

24 5.5 Collaboration Tools and Performance Management Systems Participants evidence preference to traditional ways of communication, such as and physical/virtual meeting for managing the collaboration. However, less emphasis is placed on other tools and technology, except for consolidated applications (e.g. erfq, edocument management, etc.). Among the different tools put in place, a separate section has been designed to deep dive into performance measurement system (PSM) characteristics, asking participants to describe the characteristics of the system through the type of approach used to measure performance. KEY (1 = Not measured; 2 = Unstructured measures; 3 = Qualitative measures; 4 = Quantitative measures; 5 = Qualitative and quantitative measures). Table 11. Performance Measurement System in Place Procurement process cost Savings/avoided cost Level of quality Level of standardization and rationalization of needs Supply base optimization 1 Not Measured 2 Unstructured Measures 3 Qualitative Measures 4 Quantitative Measures 5 Qualitative & Quantitative Measures NIGP CIPS NIGP CIPS NIGP CIPS NIGP CIPS NIGP CIPS 51% 10% 13% 8% 26% 43% 3% 18% 8% 20% 10% 4% 28% 8% 31% 29% 21% 35% 10% 24% 15% 4% 5% 12% 31% 45% 41% 24% 8% 14% 15% 4% 5% 20% 44% 33% 26% 29% 10% 14% 26% 12% 18% 16% 41% 37% 13% 24% 3% 10%

25 Supply base reduction Level of supplier relationships Level of relationship with other partners Level of resource competence Level of management centralization Outsourcing rate of nonstrategic activities Level of supply risk 44% 14% 8% 14% 38% 39% 8% 22% 3% 10% 28% 10% 15% 14% 41% 43% 10% 27% 5% 6% 23% 6% 23% 16% 36% 37% 8% 27% 10% 14% 33% 6% 15% 20% 31% 39% 10% 20% 10% 14% 33% 16% 18% 22% 33% 29% 8% 22% 8% 10% 49% 39% 13% 31% 26% 18% 10% 10% 3% 2% 41% 14% 8% 16% 33% 33% 10% 27% 8% 10% Analysing both NIGP and CIPS samples, the most popular form of measurement is qualitative as highlighted in blue. Overall, this study confirms that the performance culture is still under-developed with very few members reporting application of both qualitative and quantitative measures. The application of joint working for improving performance measurement through either qualitative methods or quantitative methods was found to be largely diffused. Greater contrasts in member approaches were identified for measuring process cost, supply base reduction, and level of supply risk. Using a 1 5 Likert scale, participants were asked to what extent the implementation of the CPP met or did not meet expectations according to different contribution targets, i.e. operational, strategic and policy-making. Tables 12, 13 and 14 highlight the survey results.

26 KEY (1 = Far below expectations; 2 = Slightly below expectations; 3 = In line with expectations 4 = Slightly above expectations; 5 = Far above expectations). Table 12. Operational Contribution of the Collaboration Procurement process cost Savings/avoided costs Level of quality Level of standardization & rationalization of needs Supply base optimization Supply base reduction Level of supplier relationships Level of relationship with other partners Level of resource competence Level of management centralization Outsourcing rate of non-strategic activities Level of supply risk 1 Far Below 2 Slightly Below 3 In Line 4 Slightly Above 5 Far Above NIGP CIPS NIGP CIPS NIGP CIPS NIGP CIPS NIGP CIPS 21% 4% 5% 10% 31% 47% 31% 18% 13% 20% 0% 6% 5% 8% 13% 22% 69% 41% 13% 22% 3% 2% 0% 6% 46% 47% 41% 29% 10% 16% 3% 2% 3% 10% 36% 45% 46% 27% 13% 16% 3% 0% 5% 14% 59% 55% 28% 14% 5% 16% 8% 6% 3% 12% 74% 55% 10% 10% 5% 16% 0% 0% 5% 12% 49% 45% 38% 31% 8% 12% 0% 2% 5% 18% 23% 37% 49% 22% 23% 20% 5% 0% 10% 10% 41% 49% 36% 24% 8% 16% 0% 6% 10% 16% 33% 39% 41% 20% 15% 18% 5% 8% 23% 16% 54% 55% 13% 10% 5% 10% 3% 0% 18% 14% 56% 31% 18% 37% 5% 18%

27 Table 12 features the operational contributions of CPP. For all activities, very few participants reported that contributions were below expectations, which confirms the importance and relevance of the operational activities for joint working. Stronger variations in the findings for the contribution of joint working were evident between NIGP and CIPS members for activities such as savings/avoided costs, level of quality, standardization and rationalization of needs, supply base reductions, and level of supply risk. Table 13. Strategic Contribution of the Collaboration Sourcing and delivering goods and services Compliance with legislation/regulation Efficient use of public funds 1 Far Below 2 Slightly Below 3 In Line 4 Slightly Above 5 Far Above NIGP CIPS NIGP CIPS NIGP CIPS NIGP CIPS NIGP CIPS 0% 0% 3% 6% 18% 14% 46% 63% 33% 16% 8% 6% 0% 0% 15% 16% 36% 37% 41% 41% 3% 2% 3% 4% 18% 16% 36% 47% 41% 31% Accountability 3% 6% 8% 4% 21% 18% 38% 45% 31% 27% Value for money 3% 4% 0% 4% 21% 18% 41% 43% 36% 31% Support of broader government policy objectives Delivery of broader government policy objectives 3% 4% 10% 4% 26% 18% 26% 45% 36% 29% 3% 4% 10% 6% 28% 20% 23% 43% 36% 27% The stronger, and perhaps more interesting, findings emerge from Table 13, where NIGP and CIPS respondents recognize CPP as making a significant strategic contribution. Joint working for the sourcing and delivering of goods and service was perceived slightly above or far above all citizens expectations. In addition, despite there being

28 evidence in most cases that strategic activities were in line with citizens expectations, stronger support was found for the contribution of more efficient use of public funds, better accountability and value for money provide. This provides evidence that these collaborative initiatives are of strategic relevance. Both NIGP and CIPS respondents reported that CPP plays a vital role ( far above ) in the support and the delivery of broader government objectives and compliance with legislation and regulation. Table 14. Policy-making contribution of the collaboration Environmental sustainability process Ethical sourcing process Social/community benefits policy Local economic development policy International development policy 1 Far Below 2 Slightly Below 3 In Line 4 Slightly Above 5 Far Above NIGP CIPS NIGP CIPS NIGP CIPS NIGP CIPS NIGP CIPS 18% 18% 13% 16% 59% 29% 8% 27% 3% 10% 21% 16% 5% 12% 44% 37% 15% 18% 15% 16% 21% 12% 23% 14% 31% 31% 21% 31% 5% 12% 15% 14% 15% 12% 44% 33% 15% 27% 10% 14% 36% 27% 10% 39% 41% 14% 5% 16% 8% 4% Building on the strategic relevance of CPP activities, Table 14 demonstrates that almost all respondents felt that collaboration supported policy-making objectives at least in line with citizens expectations. However, there was limited collaboration identified for cross border activity, hence there is scope to utilise CPP for improving international development. CPP initiatives have an impact in spreading social and community benefits, promoting environmental sustainability, supporting local economic development and

29 ethical sourcing. Despite there being generally weaker results for all policies, more NIGP members seem to recognize the value of CPP in these areas. *Slight variation was noted between the findings for the NIGP and CIPS report compared to a full-scale IRSPP global survey. For example, assurance of transparency, partner selection process, and sharing risks and benefits was reported more strongly for the data in this report than the full IRSPP data set. In terms of performance outcomes, supply base reduction and supply risk were identified more strongly by NIGP and CIPS members than in the general widescale survey. 6 A Detailed Framework for Analysing CPP Initiatives Utilising the evidence drawn from the survey data analysis in Tables 5 14, the framework presented in Figure 1 is reviewed, and a slightly amended and more refined framework is proposed in Figure 2. Figure 2. Revised Conceptual Framework Drivers AND Enablers Assurance of transparency Share risks and rewards Partner commitment Knowledge management Government support Partner selection process Collaboration Objectives Obtain savings / Rationalize requirements / Increase product/ service quality / Supply base management / Relationship management Organizational Design Soft and Hard organizational forms Skills and Competences Roles and Responsibilities Collaboration Process Policy forming activities / Strategy forming activities / Sourcing activities Collaboration Performance Efficiency / Quality / Demand Management / Supply Base Reduction / Level of Supply Risk / Relationship Strength / Broader Government Objectives

30 Survey participants are more likely to be driven towards CPP due to the assurance of a more transparent approach, with the opportunity to share risks and rewards and the attractiveness of partner commitment. Key enablers include knowledge management, government and high-level support, and an effective partner selection process. Figure 2 draws on the survey findings to confirm that CPP is mainly initiated by objectives in the areas of efficiency, quality, supply base and relationship management; this gives rise to mainly hard and soft informal organizational forms of collaboration, thus supported by skills, competences and establishing formal roles. The collaboration spectrum usually takes place at the sourcing level (demand management and needs definition) but can be extended to more managerial and strategic forming activities, especially when there is the need to impact performance not only at operational level (savings and enhanced quality of the process), but also at highest level (from improvement in demand and relationship management, to the support in delivering government objectives). 7 Discussion and Conclusions The literature review evidences that, when CPP is managed effectively, the benefits gained through collaborative practices such as through both improved efficiencies and effectiveness (Schotanus & Telgen, 2007) clearly outweigh some of the challenges experienced by managers. Collaboration is more often applied voluntarily, with teams understanding the benefits, rather than being enforced by a national, regional, or local mandate. Currently, the most popular forms of collaboration in public for NIGP and CIPS participant members include informal (hard and soft) approaches with participants responding well to terms such as systematically working together, bundling together requirements, or piggybacking, where not all the organisations play a formal active role. The notion of informal indicates that a variety of approaches are being adopted which may or may not be consistent across all contracts. However, practitioners should seek to

31 identify a more structured and consistent approach for higher value and higher risk projects to ensure higher quality. In terms of applying collaboration to policy making activities such as environmental sustainability, ethical sourcing, social and community benefits, economic development, and international development, findings indicate early stage development with NIGP members where contributions fall in line with citizens expectations. However, more CIPS members manage to exceed citizens expectations for sustainable development activities, such as social and community benefits and economic development. Further research would examine in more depth the links between policy and practice in collaborative working to deliver improved societal outcomes. References Bakker, E., Walker, H., Schotanus, F., & Harland, C. (2008). Choosing an organisational form: the case of collaborative initiatives. International journal of management, 1 (3), Doucette, W.R., (1997). Influences on member commitment to group purchasing organizations. Journal of Business research, 40 (3), Elston, T., MacCarthaigh, M., & Verhoest, K. (2015). Collaborative efficiency in government: what, where and why should we care? Conference paper presented at the European Group for Public Administration, Toulouse, France. Essig, M. (2000). Purchasing consortia as symbiotic relationships: developing the concept of consortium sourcing. European Journal of Purchasing & Supply Management, 6 (1), Gobbi, C. and Hsuan, J., (2015). Collaborative purchasing of complex technologies in healthcare: implications for alignment strategies. International Journal of Operations & Production Management, 35 (3), Harland, C., Telgen, J., Knight, L., Callender, G. and Thai, K.V., (2007). Challenges facing public. In Public : international cases and commentary, London, UK: Routledge.

32 Hendrick, T. E. (1996). Purchasing consortiums: horizontal alliances among firms buying common goods and services: what? who? why? how? University of Mitchigan. Center for Advanced Purchasing Studies. Huber, B., Sweeney, E. and Smyth, A., (2004). Electronic Purchasing Consortia: A Procurement Direction for the Future? International Journal of Electronic Markets, 14 (4), Johnson, P. F., Shafiq, A., Awaysheh, A., & Leenders, M. (2014). Supply organizations in North America: A 24 year perspective on roles and responsibilities Journal of Purchasing and Supply Management, 20 (2), Johnsen, T., Wynstra, F., Zheng, J., Harland, C., & Lamming, R. (2000). Networking activities in supply networks. Journal of Strategic Marketing, 8 (2), Knight, L., Harland, C., Telgen, J., Thai, K.V., Callender, G. and McKen, K. eds., (2012). Public : International cases and commentary. London, UK: Routledge. Levy, R. (2010). New public management: end of an era? Public Policy and Administration, 25 (2), Meehan, J., Ludbrook, M.N. and Mason, C.J., (2016). Collaborative public : Institutional explanations of legitimised resistance. Journal of Purchasing and Supply Management, 22 (3), pp Min, S. et al. (2005) Supply chain collaboration, International Journal of Logistics Management, 16 (2): Murray, J. M., Rentell, P. G., & Geere, D. (2008). Procurement as a shared service in English local government. International Journal of Public Sector Management, 21(5), Nollet, J., & Beaulieu, M. (2005). Should an organisation join a purchasing group? Supply ChaiManagement: An International Journal, 10 (1), O Leary, R. and Vij, N., (2012). Collaborative public management: Where have we been and where are we going? The American Review of Public Administration, 42 (5), Patrucco, A. S., Luzzini, D., Ronchi, S., Essig, M., Amann, M., & Glas, A. H. (2017). Designing a public strategy: lessons from local governments. Public Money & Management, 37 (4), Rozemeijer, F. (2000). How to manage corporate purchasing synergy in a decentralised company? Towards design rules for managing and organising purchasing synergy in decentralised companies. European Journal of Purchasing & Supply Management, 6 (1), 5-12.

33 Schotanus, F. (2005). Cooperative purchasing within the United Nations. Paper presented at the 14th Annual IPSERA Conference 2005 (March, 20-23): Researches in Purchasing and Supply Management. Archamps, France. Schotanus, F., Bakker, E., Walker, H. and Essig, M., (2011). Development of purchasing groups during their life cycle: from infancy to maturity. Public Administration Review, 71 (2), Schotanus, F., & Telgen, J. (2007). Developing a typology of organisational forms of cooperative purchasing. Journal of Purchasing and Supply Management, 13 (1), Spina, G., Caniato, F., Luzzini, D., & Ronchi, S. (2013). Past, present and future trends of purchasing and supply management: An extensive literature review. Industrial Marketing Management, 42 (8), Tátrai, T., (2015), July. Joint public. In ERA Forum. 16 (1), Berlin Heidelberg, Germany: Springer. Tella, E., & Virolainen, V.-M. (2005). Motives behind purchasing consortia. International Journal of Production Economics, 93, Walker, H., Essig, M., Schotanus, F., & Kivisto, T. (2007). Co-operative purchasing in the public sector. In L. Knight, C. Harland, J. Telgen, K. V. Thai, G. Callender, & K. McKen (Eds.), Public ; International Cases and Commentary (pp ). London: Routledge. Walker, H., Schotanus, F., Bakker, E., & Harland, C. (2013). Collaborative : a relational view of buyer buyer relationships. Public Administration Review, 73(4), Thai, K.V., (2001). Public re-examined. Journal of Public Procurement, 1 (1), Tkachenko, A., Yakovlev, A. and Rodionova, Y., (2017). Organizational Forms and Incentives in Public Procurement: Natural Experiment at a Large Public Sector Organization in Russia. International Journal of Public Administration, 38 (13-14), Vereecke, A. and Muylle, S. (2006) Performance improvement through supply chain collaboration in Europe, International Journal of Operations and Production Management, 26 (11),